Great weather sinks western vegetable market

by Tim Linden | November 24, 2017

Perfect growing conditions created a supply-exceeds-demand situation for many vegetable items following the Thanksgiving pull, and many were expecting the same conditions to prevail in December until a weather event happens.

According to Jason Lathos of Church Brothers LLC, it has been a tale of two transitions this year: the best of times and the worst of times. He told The Produce News Nov. 20 that the western vegetable industry goes through two transitions each year — in the spring and in the fall as the harvest moves from the desert to the coastal regions and back again. He reminded that in the spring the transition was not smooth, as the desert finished up before the coastal regions were ready. High prices ensued.

“On the way down, it’s been exactly the opposite,” said Lathos, manager of commodities for the Salinas, CA-based firm. “The new growing areas came on early and the old growing areas weren’t finished yet. We have too much product and low FOBs. There is only so much you can sell.”

He continued: “We like gap transitions, and we didn’t get that this time.”

Lathos said Iceberg lettuce, the leaf items, broccoli and cauliflower are all in oversupply situation and should remain so at least until the Christmas pull increases demand again in mid-December. He said celery is one of the few bright spots, and then only in comparison as supply and demand of that item are in balance.

Denny Donovan, sales manager for Fresh Kist Produce LLC in Santa Maria, CA, issued the same report.

“This is typically one of the slowest weeks of the year, and this year is as bad as it gets,” he said Nov. 21. “For everything from cilantro to broccoli, we have too much product.”

He said 70-80 degree days in the growing areas have produced big supplies and they just keep coming. With very few sales and shipments expected until the Monday after Thanksgiving (Nov. 27), he said the fields are going to be loaded with product, continuing the glut until at least midway through the first full week of December.

Donovan said a truck shortage leading in and out of the Thanksgiving holiday is exacerbating the supply situation. “Trucks are tight. A month ago it costs $6,500 [for a straight load] to go to Boston. Today, it’s $9,500,” he said, indicating that even if you had a sale, the cost of freight might kill it.

Manny Gerardo, who handles sales for Bernardi & Associates Inc. in Turlock, CA, said freight rates have done just that to the grape tomato market. He said a carton of bulk grape tomatoes was in the $40 range in mid-November, but high freight rates landed the product on East Coast retail shelves at a price that consumers wouldn’t pay.

“The grape tomato market has come way down,” he said.

But Gerardo said tomatoes in general are doing fairly well and he is expecting demand to pick up after Thanksgiving. He said that the tight transportation situation should last until early December and noted that most truckers go home for the holiday, so it will take at least a week for all of them to secure loads and get back in their regular rotation.

Gerardo said Roma tomatoes were in the $8-$10 range while flats of tomatoes were in the $17-$24 range depending on size and point of origin.

Donovan said that while most of the row crop prices look “pretty sick,” celery might be an exception moving forward. He said the hurricanes that hit Florida in September delayed some plantings and Florida celery should be late this year.

“Usually some [East Coast] customers switch to Florida by mid-December,” said Donovan. “This year, it looks like that switch won’t take place until the end of December. We could have a pretty good celery market for Christmas.”

Don Klusendorf, director of sales and marketing for Bonipak Produce Co., also in Santa Maria, CA, wasn’t quite ready to concede that the vegetable market situation would remain dire through early December, noting that a change of weather could change the situation quickly.

Several of the shippers said a cold front typically goes through the desert in December, causing a reduction in product and a shortening of the harvest day. Cold nights and early mornings can delay harvest until noon and the early setting of the sun means harvesters are typically out of the fields by 4:30 pm. That reduction in harvest time equates to less product to sell.

Klusendorf said temperatures can also get too warm and reduce yields, and temperatures were on the verge of moving into that territory.

Through the Thanksgiving weekend, the desert production areas stretching from Brawley, CA, to Yuma, AZ, were expecting temperatures to climb to near 90 degrees, which might take its toll.

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